Gas prices headed lower
The Energy Department and AAA predict a drop this year, but they don't account for variables like storms or wars.
For perhaps the first time since the fiscal cliff debates began, the government has come up with an item whose price won't increase in 2013: gasoline.
Thanks to high supply and weakened demand, the average price per gallon should fall to 5% to $3.44, according to the Energy Department. That's still well above the dreaded $3-a-gallon mark and the third highest average fuel price ever, but it's 19 cents lower than last year's record $3.63 average.
It's also an average savings of $205 per household in 2013, which theoretically could put $25 billion back into other areas of the economy -- or, you know, into Americans' savings. That's assuming the Middle East doesn't flare up again, the hurricane season doesn't yield another Superstorm Sandy and the nation's refineries stay open and keep running at capacity.
It also ignores the expiration of last year's payroll tax deduction, which increases the Social Security levy from 4% to 6% this year and will cost households making $40,000 to $50,000 an extra $600 in 2013, according to the Tax Policy Center. Also, the Energy Department's recent history with this kind of prognostication has been spotty at best. In 2011, it predicted average gas prices around $3 just before Libya's revolution halted oil production and drove the national average to $3.53. Last year's prediction was $3.45, which also fell more than a little bit outside the mark.
AAA is steering away from the government annual average and, instead, is focusing on upcoming fluctuations in fuel prices. While AAA's average U.S. gas price sits at $3.31 per gallon, the motorist organization predicts that price could go as high as $3.80 this spring before dropping to $3.20 in mid-summer. That would be the lowest average gas price Americans have paid since February 2011, but may be short-lived depending on what hurricane season brings.
Of course, those prices are also still highly contingent upon where drivers live. Right now, drivers in Utah have the lowest gas prices at an average $2.88 a gallon, while New Yorkers are still dealing with Sandy's aftermath as they pay $3.75. One region's year of cheap gas could be another area's fuel crisis.
More on Money Now
As a nearly lifelong Exxon stockholder, all I can tell you is that the folks who get the lion's share of the price of a gallon of gasoline are the taxing entities: local, state and Federal. They get it at the pump, and also through the earned incomes of the oil company's employees, not to mention taxes on land the company owns, etc, etc....the net profit they make is around a nickel a gallon. The only way they can do as well as they do is through immense product volume. Said volume will go up this summer as the Chinese, Indian, and European driving seasons hit, not to mention the US as well. BTW, oil is taxed right at the wellhead, and goes on being taxed until it finally goes into your fuel tank. Having said all that, my personal choice of vehicle to drive would be a Mercedes diesel (for the sake of the extraordinary fuel range they have, etc.) but these days, because of the cost of medical I don't have enough money to pay attention, so there we are....
Cool, I need to pick up several loads of compost. If gas is at or below 3 /gallon I can afford to make the trip several times. Might even start stocking up on next years firewood supply.
The Oil Barons,
Lest we forget, one of the biggest crooks to ever come down the pike in our industrial age was none other than John D Rockefeller. In the late 19th century his tactics and ploys created the Standard Oil Co which consolidated all aspects of the petroleum industry... from the wellhead and the transport of crude to refining and the retail of gasoline. He became the world's very first Billionaire in 1892 and his strategies regarding the petroleum industry literally wrote the 'play book' for all of the oil barons who have dutifully followed in his footsteps. As it was 120 years ago, it remains true today. The obscene and enormous profits of the oil industry enable it to purchase all of the power in high places in order to dictate petroleum business policy and to maintain their gluttonous profit-imperative at all costs. If he were here today John D would be very proud indeed of his legacy.
Peace to all ~
Here's a little something I have wondered about. Diesel fuel use to be cheaper then gas. More diesel engine vehicles were produced. Along came the 2 wars and the military was using more diesel which supposedly created a supply crunch on diesel. One war is ended so logically diesel usage by the military should have dropped which should have eased the crunch on diesel. Diesel prices still 60 to 70 cents higher then gas.
So, what is one to think when something like this is happening? If we have an abundance of oil to produce gasoline and diesel is done on the first crack of the oil shouldn't these [prices also have come down drastically? Does one think that gasoline prices will drop? Are gasoline and diesel prices being manipulated to keep them artificially high? Are we getting shafted all the way around? Will our wonderful president and all the elected officials in D.C. (you know, the community organizer and the same idiots who have us in such a mess) do some investigation to find out why this is going on? Hmmmmmm!
Be happy and stop complaining.
Copyright © 2014 Microsoft. All rights reserved.
[BRIEFING.COM] The Nasdaq Composite (+0.5%) and S&P 500 (+0.2%) posted modest gains on Thursday, but not before enduring a morning dip into the red, which took place in reaction to reports indicating Russia has commenced military exercises on the Ukrainian border.
The news from Europe knocked the key indices from their early highs, while giving a boost to safe-haven assets like gold futures (+0.5% to $1290.80/ozt), Treasuries (10-yr yield -1 bps to 2.69%), and the Japanese yen (102.30 ... More
More Market News
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'